FORM 8-K/A.--CURRENT REPORT
(AMENDMENT NO. 2)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report March 4, 1998
RSI SYSTEMS, INC.
MINNESOTA 0-27106 41-1767211
- ------------------------------- ------------------------ -------------------
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)
7400 Metro Boulevard, Suite 475, Edina, Minnesota 55439
- ---------------------------------------------------------- -------------------
(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 896-3020
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not Applicable
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Not Applicable
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not Applicable
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
<PAGE>
Not Applicable
ITEM 5. OTHER EVENTS.
Private Offering of Common Stock. On January 7, 1998, the Company
closed on a minimum private placement of its common stock in which
1,341,255 shares were sold for $1.65 per share. Net proceeds were
approximately $2,035,000. On January 22, 1998 the Company closed on an
additional 330,000 shares of common stock for $1.65 per share. Net
proceeds were approximately $487,000. The total number of shares sold
in the private placement in January, 1998 were 1,671,255, at $1.65 per
share, generating net proceeds of approximately $2,522,000.
Including the private placement on a proforma basis, the Company had a
capital and surplus balance of approximately $3,354,000 and net
tangible assets of $3,354,000 on December 31, 1997, respectively. See
press release attached as exhibit 19.1 and proforma financial
statements, exhibit 20.1.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not Applicable
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) EXHIBITS
See Exhibit Index on Page 3 which is incorporated herein by
reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RSI Systems, Inc.
Date March 4, 1998 /s/ Donald C. Lies
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Donald C. Lies
President and Chief Executive Officer
<PAGE>
RSI SYSTEMS, INC.
EXHIBIT INDEX TO FORM 8-K/A
EXHIBIT NO. TITLE OF DOCUMENT METHOD OF FILING
19.1 Press release regarding private Filed herewith electronically.
placement.
20.1 Historical and Proforma Financial Filed herewith electronically.
Statements as of December 31,
1997.
27.1 Financial Data Schedule. Filed herewith electronically
EXIBIT 19.1
MINNEAPOLIS--Feb. 4, 1998--
Approximately $2.5 Million Raised in Last 30 Days
RSI Systems, Inc. (Nasdaq: RSIS), today announced that it has
completed the private placement of 330,000 shares of its common stock at $1.65
per share. The shares offered in the private placement were not registered under
the Securities Act of 1933 and may not be offered or sold by the purchasers in
the private placement absent registration or an applicable exemption from
registration requirements.
The now concluded private equity placement raised approximately
$487,000 in the supplemental phase, in addition to $2,033,000 raised earlier in
January 1998. Total proceeds of approximately $2.5 million will be used to fund
the Company's expanded sales and marketing effort and research and development
of the Company's current generation Video Flyer video conferencing system. The
offering was made through the Minneapolis investment banking firm of Miller,
Johnson & Kuehn, Incorporated.
Don Lies, president and CEO of RSI, said that "this capital will
significantly enhance our ability to pursue the growing market opportunities we
see for our high performance group video conferencing systems. These funds will
allow us to rapidly expand our global marketing efforts while continuing to
develop new leading edge features for the existing system and next generation
video conferencing products. The additional capital also will enable the company
to meet more stringent Nasdaq listing requirements being implemented in 1998".
Founded in 1993 and headquartered in Minneapolis, RSI Systems, Inc.,
is a recognized industry leader in high quality, high performance full-motion
video conferencing systems. It is the first company to offer a family of
computer-free video conferencing systems that connect directly to any type of
television, projector display system, PC or Mac computer to allow for worldwide
video calling in less than 15 seconds, in both conference room and individual
office applications.
CONTACT: RSI Systems, Inc., Minneapolis
Don Lies
RSI Systems, Inc.
612/896-3020
or
John Mackay
Padilla Speer Beardsley, Inc.
612/871-8877
EXHIBIT 20.1
RSI SYSTEMS, INC.
Historical and Proforma Balance Sheet
As Of December 31, 1997
<TABLE>
<CAPTION>
Historical Proforma Proforma
December 31, Adjustments December 31,
1997 1997
Assets (Unaudited) (Unaudited)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents (Note 1) $ 168,406 2,522,946 2,691,352
Accounts receivable, net of allowance for doubtful 1,114,893 1,114,893
accounts of $220,120 and $210,000 respectively
Inventories 590,390 590,390
Prepaid expenses 61,486 61,486
- --------------------------------------------------------------------------------------------------------------------------
Total current assets 1,935,175 2,522,946 4,458,121
- --------------------------------------------------------------------------------------------------------------------------
Property and equipment
Furniture and equipment 732,817 732,817
Leasehold improvements 4,818 4,818
Less accumulated depreciation (454,505) (454,505)
- --------------------------------------------------------------------------------------------------------------------------
Net property and equipment 283,130 - 283,130
- --------------------------------------------------------------------------------------------------------------------------
Other assets, net 21 21
- --------------------------------------------------------------------------------------------------------------------------
Total assets $ 2,218,326 2,522,946 4,741,272
==========================================================================================================================
Liabilities and Stockholders' Equity
- --------------------------------------------------------------------------------------------------------------------------
Current liabilities:
Accounts payable 746,221 746,221
Accrued expenses 355,596 355,596
Deferred revenue 285,378 285,378
Line of credit - -
- --------------------------------------------------------------------------------------------------------------------------
Total current liabilities 1,387,195 - 1,387,195
- --------------------------------------------------------------------------------------------------------------------------
Stockholders' equity:
Common stock ($.01 par value per share, 10,000,000 shares
authorized, 4,979,776 and 6,651,031 issued and
outstanding, respectively.)(Note 1) 49,798 16,713 66,511
Additional paid-in capital (Note 1) 14,732,051 2,506,233 17,238,284
Unearned compensation (50,001) (50,001)
Accumulated deficit (13,900,717) (13,900,717)
- --------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 831,131 2,522,946 3,354,077
- --------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 2,218,326 2,522,946 4,741,272
==========================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
RSI SYSTEMS, INC.
Historical and Proforma Statement of Operations
Three Months and Six Months Ended December 31, 1997
<TABLE>
<CAPTION>
Historical Proforma Proforma
Three Months Ended Adjustments Three Months Ended
December 31, December 31,
1997 1997
(Unaudited) (Unaudited)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $ 1,031,236 1,031,236
Cost of goods sold 374,049 374,049
Inventory writedown to lower of cost or market - -
- -------------------------------------------------------------------------------------------------------------------
Gross profit (loss) 657,187 - 657,187
Research and development 196,712 196,712
Selling, general, and administrative 903,104 903,104
- -------------------------------------------------------------------------------------------------------------------
Operating loss (442,629) - (442,629)
Other income (expense):
Interest income (expense), net (34,483) (34,483)
Other income (expense), net - -
- -------------------------------------------------------------------------------------------------------------------
Other income (expense), net (34,483) - (34,483)
- -------------------------------------------------------------------------------------------------------------------
Net loss $ (477,112) - (477,112)
===================================================================================================================
Net loss per common share - basic $ (0.10) (0.07)
Net loss per common share - diluted $ (0.10) (0.07)
===================================================================================================================
Weighted average shares outstanding 4,776,613 1,671,255 6,447,868
===================================================================================================================
Historical Proforma Proforma
Six Months Ended Adjustments Six Months Ended
December 31, December 31,
1997 1997
(Unaudited) (Unaudited)
- -------------------------------------------------------------------------------------------------------------------
Net sales $ 2,127,285 2,127,285
Cost of goods sold 800,781 800,781
Inventory writedown to lower of cost or market - -
- -------------------------------------------------------------------------------------------------------------------
Gross profit (loss) 1,326,504 - 1,326,504
Research and development 422,383 422,383
Selling, general, and administrative 1,671,497 1,671,497
- -------------------------------------------------------------------------------------------------------------------
Operating loss (767,376) - (767,376)
Other income (expense):
Interest income (expense), net (51,441) (51,441)
Other income (expense), net (300) (300)
- -------------------------------------------------------------------------------------------------------------------
Other income (expense), net (51,741) - (51,741)
- -------------------------------------------------------------------------------------------------------------------
Net loss $ (819,117) - (819,117)
===================================================================================================================
Net loss per common share - basic $ (0.17) (0.13)
Net loss per common share - diluted $ (0.17) (0.13)
===================================================================================================================
Weighted average shares outstanding 4,771,355 1,671,255 6,442,610
===================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
RSI SYSTEMS, INC.
NOTES TO PROFORMA FINANCIAL STATEMENTS
December 31, 1997
1. BASIS OF PRESENTATION
The unaudited interim proforma financial statements have been prepared to
reflect the results of a private offering of the Company's Common Stock. On
January 7, 1998 and January 22, 1998, the Company sold a total of 1,671,255
shares of common stock to "accredited investors" through a private offering at a
price of $1.65 per share. Proceeds to the Company from the private placement
were approximately $2,522,000, net of placement agency fees and related
expenses. The proceeds are being used to fund the Company's expanded sales and
marketing effort, research and development of the Company's current generation
Video Flyer video conferencing system and for other general corporate purposes.
The proforma financial balance sheet includes the effects of the private
placement as if the transaction had occured on December 31, 1997.
Other than the private offering reflected on a proforma basis, the financial
statements have been prepared in accordance with generally accepted accounting
principles, pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, certain information and footnote disclosures normally
included in the financial statements have been omitted or condensed pursuant to
such rules and regulations. The accompanying unaudited financial statements
should be read in conjunction with the Company's June 30, 1997 financial
statements and related notes included in the Company's Annual Report on Form
10-KSB.
The financial statements reflect all adjustments, of a normally recurring
nature, necessary to fairly present the results of operations and financial
position of the Company for the interim period on a proforma basis as described
above.
Net loss per common share is based on the weighted average number of shares of
common stock outstanding, including 1,671,255 shares sold through the private
offering treated on a proforma basis as if the shares were sold at the beginning
of the period presented. Common stock equivalents have not been included in the
computation as the effect would be anti-dilutive.
2. STOCKHOLDER'S EQUITY:
On December 29, 1997 the Company issued 210,011 shares of its common stock as
payment on $375,895 in trade debt to two of the Company's key vendors.
<PAGE>
3. DEBT:
In July, 1997 the Company signed a commercial loan agreement with a bank for a
$1,000,000 discretionary revolving credit facility. Under the terms of the
agreement, working capital funds are drawn based on a borrowing base comprised
of eligible accounts receivable and inventory. The interest rate on the loan is
equal to 4.0 points above a base rate set by the bank. There was no outstanding
balance on the line of credit on December 31, 1997.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 2,691,352
<SECURITIES> 0
<RECEIVABLES> 1,114,893
<ALLOWANCES> 220,120
<INVENTORY> 590,390
<CURRENT-ASSETS> 4,458,121
<PP&E> 283,130
<DEPRECIATION> 454,505
<TOTAL-ASSETS> 4,741,272
<CURRENT-LIABILITIES> 1,387,195
<BONDS> 0
0
0
<COMMON> 66,511
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,741,272
<SALES> 2,127,285
<TOTAL-REVENUES> 2,127,285
<CGS> 800,781
<TOTAL-COSTS> 800,781
<OTHER-EXPENSES> 2,093,880
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 51,441
<INCOME-PRETAX> (819,117)
<INCOME-TAX> 0
<INCOME-CONTINUING> (819,117)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (819,117)
<EPS-PRIMARY> (0.13)
<EPS-DILUTED> (0.13)
</TABLE>
